The move, a response to the public outrage over the bailout of banks and other companies whose executives received lucrative paychecks, reflects a sharp departure from the hands-off approach that has dominated bank regulations for decades. In particular, pay packages at the nation’s largest banks will now come under regular review by federal examiners.This is a hardly surprising outcome of the recent spate of bailouts and government interventions in the market; it's what happens when the government decides it knows best. Sadly, it's also what happens when those in government don't understand basic economics.
But never fear! At least this isn't as intrusive as elsewhere:
But the principles proposed by the Fed are less strict than plans suggested by some European leaders and some members of Congress. They do not impose caps on pay or prohibit multimillion dollar pay packages. Instead, the rules are intended to discourage pay packages that encourage risky business practices and reward executives for long-term performance.This is the new refrain of the nanny state: "we're doing this for your own good."
When the state knows best, and society is told to just follow along, it's a sad abrogation of what liberty means.